On July 4, 2025, President Donald Trump officially signed his much-anticipated legislation, dubbed the One, Big, Beautiful Bill, into law. However, as the famous 19th-century author Margaret Wolfe Hungerford once said, "Beauty is in the eye of the beholder." The reception of Trump's new law has been anything but unanimous, with significant opposition emerging even as the bill was progressing through Congress.
Critics of the One, Big, Beautiful Bill expressed concerns that it would expedite the depletion of the Social Security trust funds, predicting that the fund would run out of money sooner than previously anticipated. Recent developments have validated these warnings, as it has now been confirmed that Trump's legislation will indeed accelerate the timeline for Social Security's fiscal sustainability.
It is important to clarify that President Trump is not the sole contributor to the potential insolvency of Social Security. This issue has been developing for years, with the costs of the Social Security retirement program, officially known as Old-Age and Survivors Insurance (OASI), exceeding its income since 2021. Income for this program is primarily generated through FICA taxes, which also support Medicare.
The trend of increasing benefits began long before Trump's presidency, leading the Social Security retirement program to rely on the OASI Trust Fund to meet its financial obligations. As of the end of 2024, this trust fund contained approximately $1.22 trillion. While this may seem substantial, the trustees of the Social Security program project that the fund will be depleted by 2034.
Interestingly, the Social Security disability program maintains its own separate trust fund and is not currently facing insolvency. However, there are concerns that Congress may tap into this fund to support the Social Security retirement program once its trust fund is exhausted, although such measures would only provide a temporary reprieve.
On August 5, 2025, Karen Glenn, the Chief Actuary for the Social Security Administration (SSA), provided insights into the bill's financial implications following a request from Senator Ron Wyden. Her letter confirmed the fears of many opponents: Trump's One, Big, Beautiful Bill has hastened the depletion of Social Security's trust funds.
Glenn indicated that the One Big Beautiful Bill Act (OBBBA) would make permanent the reduced income tax rates and revised tax brackets established under the 2017 Tax Cuts and Jobs Act. Additionally, the law temporarily increases standard tax deductions for individuals aged 65 and older, among other changes. However, these provisions will lead to a decrease in revenue flowing into the Social Security system starting this year, necessitating further withdrawals from the trust fund to maintain retirement benefits.
The SSA estimates that Trump's new law will impose a financial burden of approximately $168.6 billion on the Social Security retirement program from 2025 to 2034. Most critically, Glenn's analysis suggests that the OASI Trust Fund is now projected to run out of funds by late 2032, rather than early 2033, with the combined trust funds expected to be exhausted by the first quarter of 2034 instead of the third quarter.
With the impending depletion of the Social Security trust funds, beneficiaries could face a potential reduction in benefits by as much as 23%. This raises a crucial question: should retirees be concerned about this scenario, especially now that it could materialize sooner than previously forecasted? While the situation is undoubtedly serious, political realities suggest that members of Congress are unlikely to allow drastic benefit cuts to take effect. Such actions would be politically disastrous.
In recent years, various proposals have emerged to address the financial challenges facing Social Security. Given the urgency of the situation, it is highly probable that one or more of these proposed changes will be enacted to strengthen the program before the trust funds are ultimately depleted.
